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and honesty--never the consequence of his own management. Contemporary with him were General Enoch Parsons, Judge Henry Goldthwaite, Judge Hitchcock, and Judge Crawford-all men of ability, and holding very prominent stations in the State. Judge Goldthwaite is especially a man of clear, deep intellect; and his opinions have given great character to the decisions of the Superior Court of Alabama.
In 1823, the Legislature commenced the business of Banking. In that year it was resolved by the General Assembly, that “Whereas it is deemed highly important to provide for the safe and profitable investment of such public funds as may now, or hereafter, be in the possession of the State, and to secure to the community the benefits, as far as may be, of an undepreciated currency,” therefore, a State Bank should be chartered. Subsequently, between the years 1832 and 1835, branches were established at Montgomery, Decatur, Mobile and Huntsville--all under the exclusive control of, and owned by, the State. But two stock Banks—the Bank of Mobile and the Planters' and Merchants’ Bank, both situated in the city of Mobile, were chartered ; and, in 1842, the last was placed in liquidation. A very extraordinary contrast is presented, in respect to the influence of those institutions, between the years 1835 and the present time. Though opposed by some few, at the time of its charter, the State Bank, up to 1833-4, was conducted with extraordinary ability, and answered all the purposes of its creation. About that time, considerable increase of business, and the rage for State institutions, growing out of the peculiar policy of the administration of General Jackson, created a demand for an increase of its business, and for additional institutions. The extensive system of credits, indulged all over the country-the habit of making purchases, almost entirely with paper, intended to be negociated in bank-the facility with which paper was discounted in the banks—the unbounded issue of paper money, and the ease with which it could be borrowedcaused money to become cheap, and the price of property high. An extensive system of speculation in lands ensued, and real estate in the city of Mobile, as well as lands in the interior, reached very extravagant rates. Every man in the State became more or less connected with the banks, and the bighest expectations were indulged, not only of
the power of these institutions to pay the expenses of the State, but of their capacities, at all times, to promote individual wealth, and to redeem Bank paper. The powerful influence exercised by these institutions, and the dependence of various individuals upon their favors, made the election of Directors a matter of exciting interest. Internal and external circumstances, of this nature, almost wholly influenced them, without regard to the peculiar qualifications of the individuals. Sometimes a grand political inovement governed the elections ; at others, a combination of the interests of individuals. The consequences were, that, as one side or the other succeeded, or was defeated, one class or the other was sustained, or depressed ; that while to one party was issued an enormous amount of paper money—from others was withdrawn sums equally
At one session of a board, was swept off every officer elected at a previous one; and the election of a Directory, influenced by these official and monied interests, became the subject of long adjusted management, powerfully agitating the whole community, and largely involving their hopes and fears. It became the great object of these officers, often to subserve two purposes-to extend the largest accommodations, and to make the most favorable reports to the Legislature. In 1834 the public pulse beat high in favor of the utility of the Banks. The most plausible reports were made to the Legislature, respecting their condition, with the most glowing commendations of their management. In the session of that year, so brilliant were the representations of the business and prosperity of the Banks-so enormous were reported to be the profits of their transactions—that propositions were continually being made to abolish State taxation, and rely, for the expenses of its government, upon the profits of its Banks. There was, if we recollect rightly, but a single member of the Legislature who seriously opposed that policy-the Chairman of the Committee of Ways and Means, who refused to bring in a bill for this purpose, and subsequently resigned, rather than lend his name to such an act; it, however, was carried in 1835. That gentleman, in vain, showed, in a speech then made, that the Directory had violated the provision, which limited the amount of their issues; that the amounts represented as profits consisted of the interest on notes discounted and deducted on bills purchased; and, if not in
the bands of citizens, were, at most, in the shape of paper money, unreliable, because in great disproportion to the specie funds necessary for its redemption. The argument was, however, unpopular and unheeded. In the mean time, the bonds of the State had been issued and sold, and a heavy responsibility entailed upon her, dependent wholly upon the indebtedness of her citizens for its liquidation an indebtedness embracing bills and notes for millions, either predicated of loans based upon an expected rise in the value of real estate, or upon fictitious names. So erroneous and inconsistent with the objects of banking capital, was the course pursued, that it was every day's practice for planters, as well as merchants, to embark very largely in these vocations, without a dollar of capital, except what was obtained from the Banks; and individuals without credit or property-men of most humble capacities, and still more humble stations—through a small amount of political influence, or through the action of a friend in the Directory, were enabled, often, to borrow thousands, without the remotest means of paying hundreds.
Soon after the event to which we have alluded, the gold and silver theory began to take hold upon the public mind. This soon turned the current of opinion against the Banking system, which had been before so much in favor. The effort was now to disclose not hide their errors; and the English language was searched for terms, in which most perfectly to express, the horror of politicians at these soulless institutions. It became then evident, for the first time, that they had been badly managed; that loans had been made, without reference to the solvency of the borrower; that an extensive system of favoritism and forgeries had been resorted to; that paper had been issued without a specie basis; that crediting had been the practice of the banks to an astonishing extent. A new division of local parties took place-bank debtors became a proscribed race; and, as is usual with human nature, the errors of the agents of the State, in the management of these banks, under the eye and encouragement of the Legislature, were made ridiculously enough the errors of the system. In view of these things the Legislature of Alabama then commenced a plan of operations which, as events have proved, was of still more fatal tendency as a remedy, than the disease. Instead of viewing the condition in which the State was placed,
with calmness and caution, it immediately launched into an irritating system of sudden liquidations of banks, --of destruction to bank debtors, and of retirement of circulation; which brought the State to the brink of repudiation and her people to utter insolvency. Had the Legislature adopted a wise policy of compromises—encouraged, by firm but liberal acts, the security of her citizens' debtsprovided gradually for the withdrawal of her redundant circulation, so as to prevent its too sudden disappearance—and prepared for its redernption by a gradual, but just plan of taxation—the State would have been ir. much more prosperous condition. But, after some injudicious extension of debts, without corresponding arrangements, she forthwith rushed to a course of unmitigated and relentless hostility against both banks and bank debtors : began the work of attachments and suits against her own citizens, many of them only sureties, which would have been inconsistent with the policy or magnanimity of a private creditor: drove many to emigration, and thousands to ruin; brought upon her people a sudden system of taxation, not only onerous in amount, but still more onerous in the violation of every principle of taxation, as a science: provided for the liquidation of her banks in the heat of inalignant denunciations of their debtors, and looked about for agents, famed more for rigorous qualities in coercion of debts than for regard for the fate of debtors: sought not for men who could be left to the exercise of their personal qualities of head and heart to guard the State, while preserving the citizen ; but those rather who would be most likely to hunt the victim to his ruin :-having an eye singly to the interest of the State. This last sentence, if not the words, embodying the very idea of the last act establishing a commissioner to wind up the banks.
We should not omit to notice the effort of the Legislature in 1837 to relieve the State. The course pursued then has been much denounced, but it is evident that to subsequent legislation and not to the course of that session is to be attributed the ruin that succeeded. That Legislature and its action was under the influence of John A. Campbell, Esq., one of the finest intellects of the State, who in an eloquent and irresistible argument, unanswered and unanswerable, proved the integrity of the step then taken. Had the legislature followed out the plan then begun by
this gentleman-whom the crisis of public affairs has too seldom called from the walks of his profession, of which he is at once the ornament and support—much disaster would have been avoided.
In the midst of this history of confusion and heat, as if to give the last blow to all commercial advancement, the Legislature not only became hostile to every attempt to establish banking institutions on more correct principles, but by severely penal acts prohibited the ingress of the capital of other States. The exploded, because impracticable theory of a golden currency, in the face of every experience of the times, was continued to be harped upon to the people; and Alabama, with her wonderful resources, has thus, in opposition to what both theory and practice has every day, and in every State confirmed, been the victim of delusion, and left, in every measure of national interest, half a cen tury behind the age. It is not our purpose to discuss the gold and silver doctrines of the times just past; but admitting them to be correct in the abstract, which we do not believe, how can the public men of Alabama expect to sustain such a theory in spite of the fact that every other State repudiates it? How can Alabama hope to carry on commercial transactions without some thing in the shape of money to represent the industry and product of the country--without direct trade with a nation of exclusive metallic currency--dependant as she is on other States for all that is necessary for her existence--for agents to sell her produce and purchase her imports—for ships to carry them-without manufactures with but one restricted bank surrounded with argus-eyed enactments, and cerebus-headed political prejudices-enclosed by States, all using a paper currency, necessarily connected with her; and all encouraging commercial enterprise—her legislature opposed to every measure of internal improvement-and with no system of taxation which the people can tolerate, without a comparison of the evils of repudiation with the sin of the violation of every principle of taxation? The truth is, that, upon the subject of banking, the State of Alabama has, it seems to us, strangely overlooked some of the very plainest truths. She has been als ays upon the extremes of this question ; and in these extremes have been found her greatest errors.
At one time we find her issuing paper to an extent unheard of in the history of banking; at an